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March 2, 2005

E-filing Running at Record Pace

Washington D.C. - At the mid-point of tax filing season,
the Internal Revenue Service announced today that taxpayers have used e-file
at a record rate.

Out of 47 million tax returns filed through Feb. 25, 74 percent of them were e-filed
- up from 69 percent the previous year. While this percentage traditionally declines
as April 15 approaches, the IRS expects
for the first time to have more than half of all individual tax returns filed electronically.

In all, more than 35 million returns have been e-filed this year. The biggest jump comes
from self-prepared tax returns filed with a computer, which has increased nearly
14 percent to 8.7 million returns.

The jump in computer use coincides with another strong year from the Free File program.
The IRS and a consortium of tax software
manufacturers offer free services through Free File, which is available at
www.IRS.gov.
More than 2.77 million returns came in through Free File through Feb. 23, which is a
42.6 percent increase from last year’s 1.94 million returns.

“E-filing is making a strong start,” said IRS Commissioner Mark W. Everson.
“Taxpayers and tax professionals are becoming increasingly comfortable with
e-filing. It’s fast, easy and you get refunds in half the time.”

The growth in e-file comes as record tax refunds are being sent to taxpayers. The average
refund so far is $2,436 - a record amount and more than $200 more than last year.

The IRS also is seeing record numbers
of people using direct deposit for their refunds. More than 29 million have selected
direct deposit, up 4 percent from last year. So far this year, three out of four
taxpayers receiving refunds have used direct deposit.

Taxpayers who e-file and choose direct deposit get their refunds in half the time of
those who file a paper return. Even paper filers, however, can get the benefit of
direct deposit by choosing that option on their tax forms; they will get their
refunds a week sooner than waiting for a paper check.